Pennsylvania Commonwealth
Court orders Work Comp insurer to reimburse an injured worker for out-of-pocket
expense for medical marijuana
In two recent decisions, the
Pennsylvania Commonwealth Court reversed the Workers Compensation Judge
decision and ordered the workers compensation insurer to reimburse
out-of-pocket expenses, incurred by an injured worker, as reasonable and
necessary medical expenses. See:
Teresa L. Fegley, as
Executrix : of the Estate of Paul Sheetz v. Firestone Tire & Rubber (WCAB), No. 680 C.D. 2021 opinion filed March 17, 2023
And
Edward Appel v. GWC
Warranty Corporation (WCAB),
No. 824 C.D. 2021 opinion filed March 17, 2023
Issues Presented in
Appeal to the Commonwealth Court
The Appel appeal argued
one issue, that the WCAB erred:
1. by concluding
that a workers compensation insurer or employer cannot be required to pay for
the lawful use of medical marijuana based on the plain language of the Medical
Marijuana Act (MMA) section 2102.
The Fegley appeal argued several issues, that
the WCAB erred:
1. as Employer did not raise and therefore waived,
Section 2102 of the Medical Marijuana Act as a defense;
2. by concluding Section 2102 of the MMA applies
to WC carriers and overrides the WC Act requirements that insurers pay for
reasonable, necessary medical treatment that is related to an accepted work
injury;
3.by
concluding that Section 2102 of the MMA precludes reimbursement for medical
marijuana to a claimant such treatment was determined to be reasonable,
necessary and related to an accepted work injury;
4. by
failing to address and reverse the WCJ’s sole basis for denying the Penalty
Petition – that reimbursement of Claimant’s medical marijuana treatment would
cause the WC carrier to violate federal law.
NOTE: As the Fegley opinion and reasoning is
cited and relied upon in the Appel decision, we will utilize the Fegley
opinion as the starting point for analysis of these Medical Marijuana issues.
Fegley Opinion - Commonwealth Court Conclusions
Employer did preserve the
defense that Section 2102 of the MMA prevented the WCAB from compelling
Employer to reimburse Claimant for his lawful use of medical marijuana.
Section 2102 of the MMA applies
to WC carriers. The plain language of Section 2102 is limited to not requiring
insurers to provide coverage for medical marijuana. The Court resolved
that the term “coverage” is different and distinct from the term “reimbursement”
…
Such that … there is no
statutory language which prohibits insurers from reimbursing claimants
who lawfully use medical marijuana to treat a work injury when such treatment
is medically reasonable and necessary.
***
The Commonwealth Court
reasoning and resolution is based upon several factors. Given:
-
the WC Act’s
“humanitarian objectives” ;
-
reimbursing
Claimant for his out-of-pocket expenses for his lawful use of medical marijuana
as a reasonable and necessary treatment for his work injury would not require
Employer’s WC carrier to violate the Federal Drug Act, or be at risk of facing
federal prosecution by doing so;
-
the General
Assembly’s express intent to provide Commonwealth citizens who are patients “access
to medical marijuana,” 35 P.S. §10231.102(3)(i) (emphasis added);
-
the MMA’s
containment of an immunity provision protecting patients from government
sanctions;
-
and the MMA statement that “no individual
‘shall be . . . denied any right or privilege, . . . for lawful use of medical
marijuana . . .”.
… the Commonwealth Court concluded that the
Board erred, and the Court ruled that Employer’s failure to reimburse
Claimant’s out-of-pocket costs for medical marijuana to treat his work-related
injury is a violation of the WC Act.
The Fegley WCAB Order denying Claimant’s
Penalty Petition is reversed and the matter is remanded to the WCAB to remand
to the WCJ to determine whether a penalty should be imposed.
The Appel WCAB Order partially denying Claimant's Review Medical Petition was reversed.
***
For a more detailed review
of the analysis of the Commonwealth Court Opinions, we will review the
background facts, procedural status and the reasoning provided:
Fegley Background and
Procedural History
Claimant sustained a 1977 work-related injury. Medical
treatment included back surgeries, opiates and narcotics prescribed for severe
back and leg pain. Claimant began using medical marijuana in 2019 at his
doctor’s recommendation. Medical marijuana afforded Claimant pain relief and
reduced his need for opiates and narcotics. A 2019 UR determination determined
Claimant’s medical marijuana use was reasonable and necessary.
Claimant filed a Penalty Petition that Employer’s
failure to pay for his medical marijuana, despite the UR Determination, was a
violation the WC Act. The WCJ 2020 Decision denied the Penalty Petition,
concluding that Claimant failed to prove that Employer’s refusal to pay for
medical marijuana treatment violated the WC Act. The WCJ decision granted
Employer’s Petition for Review of Utilization Review Determination. The WCAB
Affirmed.
Appel Background and
Procedural History
Appel sustained cervical and
lumber injuries in 2006, which were accepted as compensable via a Stipulation
approved in a 2015 WCJ Decision.
Appel received extensive
medical treatment, including surgeries. His physician prescribed opioids for
chronic low back pain and leg symptoms. In April 2018, he received a medical
marijuana card and used medical marijuana for withdrawal symptoms while weaning
off of opioids. He testified medical marijuana was more effective than any
other medication, as opioids became less effective over time.
A Review Medical Petition
sought a determination that his medical marijuana was causally related to his
work injury and an order directing Employer to reimburse him for the cost. A
2020 WCJ decision concluded claimant proved his medical marijuana use was related to the accepted work
injury, however claimant failed to prove that Employer must reimburse him for
his out-of-pocket medical marijuana expenses pursuant to Section 2102 of the
MMA, which does not require an insurer or health plan to provide “coverage” for
medical marijuana. WCAB affirmed.
***
Commonwealth
Court Analysis
The
Fegley and Appel decisions utilized the same analysis and reasoning
to address and resolve the Medical Marijuana issues.
The analysis of the majority
opinion began with the ubiquitous statement that the Pennsylvania Workers
Compensation Act (WCA) is remedial in nature and intended to benefit the
worker, and, therefore, the Act must be liberally construed to effectuate its
humanitarian objectives.
Responsibility for
work-related medical expenses
Pursuant to Section 301(c) of
the WCA, an employer is only liable to pay for a claimant’s medical expenses
that arise from and are caused by a work-related injury.
A claimant has the initial
burden to establish an injury is work-related Once employer is established, the
claimant is not required to continually establish that medical treatment is
causally related. Thereafter the
employer has the burden to prove that a medical expense is unreasonable,
unnecessary, or is not related to the accepted work injury.
Review of the Pertinent
Medical Marijuana Act Provisions
The Commonwealth Court reviewed Section 102 of
the MMA, which provides, in part: 1) Scientific evidence suggests that medical
marijuana is one potential therapy that may mitigate suffering in some patients
and also enhance quality of life… (3) It is the intent of the General Assembly
to: (i) Provide a program of access to medical marijuana which balances
the need of patients to have access to the latest treatments with the need to
promote patient safety. (ii) Provide a safe and effective method of delivery of
medical marijuana to patients… 35 P.S. § 10231.102).
Under the MMA, use or
possession of medical marijuana as set forth in the MMA is lawful within this
Commonwealth.” Section 303(a) of the MMA, 35 P.S. § 10231.303(a).
The Court assigned relevance to the MMA immunity
provision protecting patients from government sanctions. Per the statute, no
such individual “shall be subject to arrest, prosecution or penalty in any
manner, or denied any right or privilege, . . . solely for lawful use
of medical marijuana . . .”. See Section 2103(a) of the MMA.
Arguments –
Application of MMA to WC Insurers
Claimant argued the MMA did not apply to work comp
insurers.
Employer argues a WC carrier is an insurer, as
defined by the WCA and Insurance law. As WC carriers are insurers under the
law, the Court held that they are “insurers” for purposes of the MMA.
Section 2102 of the MMA –
“Coverage” Arguments
Claimant argued that Section 2102 of the MMA only
prohibits an insurer or health plan from being compelled “to provide coverage
for medical marijuana.” 35 P.S. § 10231.2102. Claimant maintains that coverage
refers to the insurer paying the provider directly for a medical service,
while reimbursement signifies the insurer paying the patient for
the costs of medical treatment already incurred and paid.
Employer asserts that the MMA’s plain language exempts
employers/insurers from being required to cover medical marijuana.
The Court resolved this issue by reviewing the
statutory language. While the MMA provides that an insurer is not required to
include medical marijuana as a risk under its insurance policy, there is no
language in the MMA precluding a WC carrier from repaying a claimant for his
out-of-pocket medical treatment cost which has been found to be reasonable and
necessary for his work-related injury.
Because the plain language of Section 2102 of the MMA
is limited to not requiring insurers to provide coverage for medical
marijuana, and the WC Act mandates WC carriers to reimburse claimants
for out-of-pocket costs of medical treatment, which has been found to be
reasonable and necessary for their work-related injury, the MMA does not
command otherwise.
If the PA General Assembly intended for medical
marijuana expenses not to be reimbursable, it would have expressly included the
word reimbursement, as other states have explicitly done, but it did not.
Section 301 Section 306(f.1)(1)(i) of the WC Act
requires: “The employer shall provide payment in accordance with this section
for reasonable surgical and medical services, . . . medicines and supplies, as
and when needed.” 77 P.S. § 531(1)(i).
The Court rejected the Employer’s arguments. The MMA
specifically mandates that no medical marijuana patients be denied any rights
for lawful use of medical marijuana and the WC Act provides employees a
statutory right to WC medical expenses that are reasonable and necessary to
treat a work injury; therefore, if this Court was to agree with Employer, it
would be removing those express protections from the MMA and the WC Act.
The Commonwealth court rejected Employer’s argument
that the MMA to prohibits WC carriers from reimbursing claimants who lawfully
use medical marijuana to treat their work-related injuries – noting this
interpretation would undermine the
General Assembly’s express intent to provide patients “access to medical
marijuana…”.
In summary the Court ruled that
“coverage” is different and distinct from “reimbursement” and while the plain
language of Section 2102 of the MMA states that insurers cannot be required to
provide coverage for medical marijuana, there is no statutory language
which prohibits insurers from reimbursing claimants who lawfully use
medical marijuana to treat an accepted work injury when such treatment is
medically reasonable and necessary.
Claimant Federal Law Argument
Claimant argued the Board erred by failing to address,
and reverse, the WCJ’s sole basis for denying the Penalty Petition - that
reimbursement would cause the WC carrier to violate federal law. As the Board
was able to resolve the issue based on Pennsylvania law, albeit erroneously, it
is of no moment that the Board did not decide the federal law issue.
Note Section 2103 of the MMA mandates: “Nothing in the
MMA shall require an employer to commit any act that would put the employer or
any person acting on its behalf, i.e., WC carriers, in violation of federal
law.” 35 P.S. §10231.2103.
Because reimbursing Claimant for his out-of-pocket
expenses for his lawful use of medical marijuana as a reasonable and necessary
treatment for his work injury would not require Employer’s WC carrier “to
manufacture, distribute, or dispense, or possess with intent to manufacture,
distribute, or dispense, a controlled substance,” 21 U.S.C. § 841(a),
Employer’s WC carrier would not violate the Federal Drug Act, or be at risk of
facing federal prosecution by doing so.
As
the employer is not prescribing marijuana, but rather reimbursing the claimant
for his lawful use, the employer is not in violation of the Federal Drug Act.
The fact that dispensing marijuana is illegal under federal law does not
transform a medically reasonable and necessary treatment under the WC Act for a
work injury to a medically unreasonable and unnecessary treatment. Such a
determination would eviscerate the entire MMA.
***
CONCURRING AND DISSENTING
OPINION
In the workers’ compensation context, and under the
current state and federal laws, I cannot conclude that the MMA requires a WC
insurance carrier to pay a claimant’s costs incurred in purchasing medical
marijuana. Therefore, for the following reasons, I respectfully disagree with
the majority’s conclusion -
I.
The MMA Does Not Require an
Insurer to Pay for Medical Marijuana
Section 102 of the MMA, 35 P.S.
§ 10231.102 seeks to advance medical research and enhance quality of life, but
it also reflects caution in enacting “a temporary measure” regarding access to
medical marijuana, as well as “balancing the need of patients to have access to
the latest treatments with the need to promote patient safety” .
Section 2102 of the MMA, relating to insurers,
provides: “Nothing in this act shall be construed to require an insurer or a
health plan … to provide coverage for medical marijuana.” 35 P.S. § 10231.2102.
The WCAB correctly concluded that the plain language of Section 2102 does not
require reimbursement for medical marijuana prescribed to a claimant to treat a
work injury.
Section 2102 does not expressly address
“reimbursement” of medical marijuana costs, but rather provides that the MMA
cannot be construed to require an insurer to provide “coverage” of such costs.
35 P.S. § 10231.2102. However, “coverage” is not defined in the MMA. Further,
the Board did not address whether “coverage” and “reimbursement” are synonymous
under the MMA.
The majority echoes Claimant’s
argument that “coverage” is not the same as “reimbursement,” The MMA does not
require “coverage” for medical marijuana expenses but it requires Employer to
reimburse Claimant for those expenses. I respectfully disagree.
Insurance reimbursement is when
one is reimbursed in accord with an insurance policy, for expenses that have
been incurred and are covered under the policy . . . . Some types of
insurance reimbursement are paid to the insured person. Other types of
reimbursements are paid directly to the provider after the provider has
submitted an assignment of benefits document to the insurance company. Each
insurance policy has specific items for which expenses are covered, not covered
or covered in part. In other words, “coverage” is the extent of the insurer’s
potential liability under an insurance policy; “reimbursement” is repayment of
claims for which there is “coverage” under the policy. “Coverage” and
“reimbursement” are two sides of the same coin: if there is coverage for a
claim, the insurer must provide reimbursement.
Thus, it makes no sense for
Claimant to argue that reimbursement may be required where coverage may not. Nonetheless,
Claimant argues that because the WC Act is to be liberally construed, the MMA
should not be interpreted to preclude reimbursement that is otherwise required
by the WC Act. The most obvious flaw in this argument is that prior to the
enactment of the MMA, there was no legal medical marijuana in Pennsylvania, and
therefore, no reimbursement was required for it under the WC Act.
The MMA legalized medical marijuana for the first time
and in a limited manner; in doing so, it made clear that it was not to be
construed to require insurance coverage of medical marijuana. This makes sense,
inasmuch as medical marijuana has not yet been approved by the FDA as safe and
effective for use in medical treatment, and its use is not legal under federal
law. In any event, the legislature, not the courts, must effect any change in
the MMA’s stated policy and the balance struck regarding insurance coverage.
Therefore, I believe this Court is constrained to agree with the Board that the
MMA cannot be read to mandate reimbursement for prescribed medical marijuana
provided to WC claimants.
II. Alleged
Waiver of Employer’s MMA Defense
I concur in the majority’s conclusion that Employer
did not waive its ability to assert a defense of illegality. In addition, I
believe the defense is not subject to waiver as a matter of law.
An employer that unilaterally stops paying a
claimant’s medical bills is subject to penalties under the WC Act, at the
discretion of a WCJ, if the WCJ finds that the medical bills are causally
related to the employee’s work injury.A claimant who files a penalty petition
must first meet his initial burden of proving a violation of the WC Act occurred.
The burden then shifts to the employer to prove the violation did not occur.
Here, the Utilization Review
(UR) Determination found that medical marijuana was reasonable and necessary to
treat Claimant’s pain and Employer did not appeal that determination. Thus,
without more, it might be argued that Claimant met his burden of showing a
violation of the WC Act in Employer’s refusal to pay for Claimant’s medical
marijuana.
However, the WCJ found that requiring Employer to pay
for Claimant’s medical marijuana would improperly force Employer to commit a
crime under federal law. The issue is whether Employer could waive its
illegality defense, as it failed to appeal the UR Determination. Both this
Court and our Supreme Court have found the defense of illegality cannot be
deemed waived in other contexts, such as employment and contract actions.
III. Current State of
Federal Law on Marijuana
As the majority correctly
observes, Section 2103 of the MMA specifies that nothing in the MMA requires an
employer to commit any act that would violate federal law. Claimant argues that
the Board erred in not addressing and reversing the WCJ’s sole basis for
denying the Penalty Petition, that reimbursement would cause the WC carrier to
violate federal law. This Court need not reach this issue because, as discussed
above, the MMA expressly does not require insurance reimbursement of medical
marijuana costs. In any event, however, Claimant’s argument lacks merit.
At first blush, Claimant’s argument appears somewhat
persuasive. The federal Controlled Substances Act does not expressly forbid
reimbursement for prescribed medical marijuana. Therefore, it appears an
insurer reimbursing for medical marijuana costs under state law could be
subject to federal prosecution only on a secondary basis as either an
aider/abettor or an accessory after the fact.
However, both parties’
arguments relate solely to the legality of a WC insurer’s conduct in
reimbursing costs of medical marijuana. Both parties, as well as the Board,
ignore the fact that, unlike the insurer, the provider necessarily distributes
or dispenses medical marijuana. Thus, the provider necessarily violates federal
criminal law by doing so. Case law is sparse on this issue, but in other
contexts, this Court has held that where a provider cannot provide treatment
legally, that treatment cannot be deemed reasonable and necessary, and the
provider cannot obtain reimbursement.
As discussed above, although the MMA legalizes the use
of medical marijuana in Pennsylvania, a provider still cannot legally dispense
medical marijuana under federal law. Therefore, because it is illegal, such
treatment cannot be reasonable and necessary under the WC Act; accordingly, the
dispenser cannot obtain reimbursement from a WC insurer.
IV. Dissenting Opinion Conclusion
Based on the foregoing discussion, I do not believe
the MMA can be read as requiring a WC insurer to pay the costs of medical
marijuana. Although it does not expressly forbid requiring such reimbursement
under a separate statute such as the WC Act, the MMA effects no change in the
preexisting reimbursement requirements, because it expressly cannot be read to
create a reimbursement requirement where, as here, one did not exist before.
***
RECOMMENDATIONS
1. When assessing liability for medical marijuana reimbursement expenses - is the medical marijuana expense in addition to ongoing medications or is it a replacement for more expensive treatment options?
2. Is an Independent Medical Expert Evaluation necessary to address questions of the causal relationship and/or the reasonableness and necessity of the medical marijuana expense to the accepted work injury?
3. Is a Utilization Review necessary to address questions of the reasonableness and necessity of the medical marijuana expense to the accepted work injury?
4. A this time, this intermediate appellate court decision approves the reimbursement of out-of-pocket expenses to an injured worker for medical marijuana expense that has been determined to be reasonableness and necessity treatment of an the accepted work injury. These are specific requirements for reimbursement.
... This intermediate appellate court decision did not approve the reimbursement of medical marijuana expense to a provider.
